Chapter 8 - Why Luca had been removed
Nine months earlier, an internal audit found unusual vendor pricing.
Not theft at first glance.
Flowers cost more.
Tent rentals cost more.
Transportation rates were consistently above market.
Luxury gift bags had unexplained “coordination” fees.
Bianca’s company invoiced disclosed planning fees.
Nothing wrong with that.
Then vendors were interviewed.
Several disclosed separate rebate arrangements.
If Moretti Hospitality spent $100,000 through certain preferred suppliers, the supplier returned:
8%.
10%.
Sometimes 15%.
To whom?
Not Moretti Hospitality.
To Verde Social House.
Bianca called them:
Volume incentives.
Could they be legitimate?
Yes.
Vendor rebates are common in many industries.
The problem was disclosure.
Our companies believed Bianca was selecting vendors based on service and price.
She was sometimes selecting them partly because they paid her.
Luca knew.
Worse:
He approved the arrangements.
His explanation:
“Everybody got what they paid for.”
Not quite.
If we knew the real economic cost included a rebate to our family planner, we could negotiate differently.
The failure was:
Conflict disclosure.
Procurement integrity.
Accounting.
Potential tax treatment.
Possibly fraud depending transaction.
Not every rebate was criminal.
But hiding them was unacceptable.
I removed Luca from procurement.
He lost his executive role.
He kept minority ownership interests legally belonging to him.
I did not steal his shares.
I did not have him beaten.
I had done enough wrong in my younger life.
This time:
Audit.
Lawyers.
Governance.
May you like
That was his “lesson.”
Bianca apparently thought I knew only about Luca.
